Bringing the last billion people out of poverty with trade.
Despite the best efforts of global policymakers, we are now six years removed from the financial crisis and still haven’t achieved the kind of economic lift we need to create a world that is more prosperous and secure. While the monetary stimulus from central banks served to stabilize the global economy, many of us are still searching for the event or the initiative that triggers a new wave of global growth.
“Giving every peasant farmer, every artisan, and every entrepreneur and business owner the right to sell their goods and services freely is the best move we can make to restore growth—and prosperity.”
I’m referring to the various trade agreements that are in different stages of negotiations, including the Trade in Services Agreement, the Transatlantic Trade and Investment Partnership, the Trans-Pacific Partnership, the World Trade Organization’s Environmental Goods and Information Technology Agreements, as well as the various bilateral and regional initiatives other countries are negotiating.”
While many of these agreements are regional in scope, the global nature of most supply chains ensures that these initiatives will provide benefits far beyond the participating countries.
By lowering tariff and non-tariff barriers, liberalizing services and public procurement, and promoting greater cooperation among regulators, the current proposals could lead to the creation of more high-quality jobs by increasing trade among the world’s most robust economies.
For instance, the transatlantic agreement is expected to provide as much as a €119 billion permanent annual lift to the European economy, a €95 billion boost annually to the U.S. economy, and could increase all other countries’ global income by up to €100 billion a year.
What’s more, these agreements should help bring countries closer together. If anything, the 2007 financial contagion taught all of us that greater economic cooperation and integration are required given the speed at which global crises can occur.
Too Powerful to Ignore
Of course, these initiatives have been met with some political resistance. That shouldn’t have surprised anyone. Nearly 200 years ago, Lord Macauley noted that “free trade – one of the greatest blessings which a government can confer on its people – is in almost every country unpopular.” But all of us have a moral obligation to not waver in our support because the benefits of trade – economic and humanitarian – are too powerful to ignore.
Consider that in the two decades following the fall of Communism, the poverty rate in the emerging economies fell roughly by half, to 21 percent. In Asia alone, 525 million people today count themselves as middle class — more than the total population of the European Union.
While the development banks and policymakers in these countries deserve their share of the credit, we can’t deny the role that global trade has played.
Still, there’s much more to do. Last year, World Bank President Jim Yong Kim set a goal of bringing the last billion people out of poverty by 2030. While Mr. Kim himself acknowledged the enormity of the task, we all have an obligation to support this effort.
For as George Bernard Shaw said, poverty is “the greatest of evils and the worst of crimes.” Giving every peasant farmer, every artisan, and every entrepreneur and business owner the right to sell their goods and services freely is the best move we can make to restore growth—and prosperity.